Washington D.C. – Gary Cohn, former National Economic Council director under President Trump and current IBM Vice Chairman, has indicated a weakening job market in recent months. Cohn’s assessment aligns with concerns voiced by the Federal Reserve, which recently lowered its benchmark interest rate in response to slowing economic growth and a cooling labor market.
Speaking on CBS’s “Face the Nation,” Cohn stated, “We’ve seen the job market degrade,” adding that the Federal Reserve itself has acknowledged this decline. The Fed’s recent decision to cut interest rates by 0.25 percentage points, the first such move since December, reflects anxieties about the economy’s trajectory. Federal Reserve Chair Jerome Powell has emphasized the changing risks to the labor market, noting a slowdown in payroll job creation as a key indicator.
Cohn highlighted government data showing a decrease in monthly job creation, from over 100,000 jobs to less than 50,000 in recent months. He attributed this trend to companies facing rising input costs due to tariffs and other factors, limiting their ability to raise prices. As a result, Cohn explained, companies are resorting to labor cost reductions to maintain profit margins.
Cohn suggested that companies are transitioning from a period of “hoarding labor” during the COVID-19 pandemic to a more aggressive approach to expense management. This includes allowing the workforce to decline naturally through attrition and retirements. He asserted that this trend is evident across various business sectors, not just the tech industry, based on conversations with corporate CEOs.
Regarding the Federal Reserve’s rate cut, Cohn emphasized the importance of the committee’s near-unanimous decision. He saw this as a demonstration of the Fed’s independence and its ability to consider economic data objectively when formulating its projections for interest rates. Cohn believes the Fed’s actions are justified based on the current economic conditions.
